Nigeria's President Umaru Yar'Adua is coming under intense criticism after he reportedly announced the he will seek cabinet approval next week for draft legislation to restructure the state oil and gas sector. The move would break up the Nigerian National Petroleum Corporation (NNPC). Critics of President Yar'Adua say previous sales of the country's national assets not only failed to achieve their intended objective, but were also bought by allies whom opponents describe as friends of those in power. But President YarAdua's government says the reforms aim to create an independent, profit-driven state oil firm that can raise funds by investing in capital markets instead of using government revenue.
If the proposal is approved, the bill will be submitted to the National Assembly for debate. Chudi Chukwuani is a Nigerian economist. From the capital, Abuja he tells reporter Peter Clottey that privatization of Nigeria's assets has not been in the interest of the ordinary Nigerian.
"My reaction is we want to see what it is that he wants to restructure. But in order to break the monopoly of the NNPC, it sounds to me that he is planning to privatize NNPC. And it seems to me that the desire for the privatization of NNPC is in line with what was done by President Olusegun Obasanjo on the privatization of state enterprises, whereby the state enterprises Obasanjo sold and the whole thing was designed for a few private individuals. Associates of the president used the sale to corner the state assets, which was what was done during the Obasanjo regime," Chukwuani noted.
He said privatization of Nigeria's assets did not yield any positive results for the ordinary Nigerian.
"If you look at all the privatization that was done, there has been no significant economic gain to the larger society," he said.
Chukwuani said he is not overly enthused about the president's proposal.
"I strongly disagree with that line of argument because if he wants to do something positive on NNPC, he has to go and look at the NPPC original charter. NNPC was set up at the time that countries like Venezuela and Saudi Arabia did not have a national oil company. NNPC was principally set up in order to build up local capacity in order to achieve technological transfer. Those principal objectives of NNPC have not been realized to date. NNPC cannot run an oil well from top to bottom," Chukwuani noted.
He said the country's oil company has so far failed to live up to its billing.
"What you have in NNPC is a bunch of people who are completely unpatriotic and who are there in order to line their own pocket. You know, they have formed themselves into a cabal," he said.
Chukwuani said there are many options available to President Yar'Adua that would tackle the problems of the country's oil company.
"The way he can go about it if he is sincere to himself is, number one, to stop completely any executive interference in the affairs in the NNPC. He would immediately sack everybody there and put new people who are patriotic and who knows what their responsibilities are. He would give them target, goals that he needs them to achieve for the benefit of the people. He would immediately put a stop to the nepotism currently going on in the NNPC. How can a president in good conscience in a country of 140 million people appoint his cousin as the managing director of NNPC? That is a president that does not understand conflict of interest. So those are the things he needs to do if he is sincere to himself," Chukwuani pointed out.
Meanwhile, both Nigeria's unions and opposition parties have reportedly criticized the Nigerian National Petroleum Corporation for what they describe as a lack of transparency in the management of contracts for fuel imports and crude exports, estimated to be worth billions of dollars annually. NNPC controls about 60 percent of the country's oil production of around 2 million barrels per day, but the company struggles to finance its share of investment because it is poorly managed and structured.